ATMs have stopped dispensing `2,000 notes but cash recycling machines will continue to accept the deposit of these currency notes. According to industry experts, withdrawals of other denominations of currency from ATMs will not be impacted due to the pulling back of `2,000 notes from circulation.
Sumil Vikamsey, Managing Director and CEO – Cash Business, Hitachi Payment Services, said about
10% of the ATMs and cash recycling machines (CRMs) managed by Hitachi Payments have been impacted due to the withdrawal of `2,000 currency notes from circulation.
“All these machines have been reconfigured to stop dispensing `2,000 currency notes. The CRMs can still be used to deposit `2,000 currency notes as debit cards are KYC compliant and in the name of the account holder,” he said.
The reconfiguration of ATMs for most banks was done at a central level following the Reserve Bank of India’s announcement on May 19 to withdraw them from circulation.
The `2,000 notes account for about 10% of the cash in circulation and gradually, the number of ATMS dispersing these notes have also reduced in recent months with only certain ATMs that tended to see high value transactions configured to disburse these notes. According to industry estimates about 5% to less than 10% of all ATMs were configured to dispense `2,000 notes.
Industry experts point out that typically have four cassettes to disburse four denominations of currency including `2,000, `500, `200 and `100. However, 90% of the ATMs were already configured to disburse only `500, `200 and `100 notes and the facility of `2,000 notes was limited to about 10% of the ATMs.
Industry watchers said the usage of such notes at retail outlets had also declined in recent months. In cash pickups from these outlets for depositing at banks, just about 2% to 3% of the tended to be in `2,000 notes.
“It does not seem that the withdrawal of these notes will have a significant impact as their usage had gone down considerably and they seem to be more of a store of value,” said an executive with a cash handling company.
Bankers too have said that they do not expect too much rush for the exchange of these notes although bank branches are being adequately prepared to deal with customers.
As of March-end 2023, `2000 notes in circulation constitute `3.62 trillion or 10.8% of notes in circulation as against `6.73 trillion at its peak in March 2018 when these high value notes accounted for 37.3% of the notes in circulation.
“Unlike November 2016 DeMon episode of overnight scrapping of then-existing currencies’ legal status, the present `2,000 notes will continue to remain as legal tender. Thus, this move cannot be compared to DeMon,” said a note by Emkay Global Financial Services. A similar move was taken in Jan-14, where the RBI advised that banknotes issued prior to 2005 would be withdrawn gradually, and the process was done smoothly over the stipulated time, it also pointed out.
